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NEWS RELEASE (CNS790) -->> EDUCATION/CULTURE--SURPLUS
MONEY BELONGS IN CLASSROOM
EDUCATION/CULTURE--SURPLUS MONEY BELONGS IN CLASSROOM
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A $10 million surplus identified in the Nova Scotia Teachers'
Union group insurance plans belongs to taxpayers, teachers and
school boards, Education and Culture Minister Robbie Harrison
said today. "I want to see every possible dollar go back to the
children, the classrooms and the teachers in this province."
Mr. Harrison was commenting on surpluses identified in an Auditor
-General's report on the life, medical, and other plans managed
by the Nova Scotia Teachers Union (NSTU) Group Insurance Fund
Trustees. The audit covered four group insurance funds (life and
accidental death and dismemberment; medical; dental; and salary
continuation) and followed years of provincial requests for full
disclosure which were repeatedly blocked by the NSTU.
Last year, the province changed the law to compel the NSTU to
open the books to the Auditor-General.
"As a government, we are entrusted with public funds, and have a
responsibility to ensure they are spent appropriately," said Mr.
Harrison. "I have asked the NSTU to return this money so it can
be put where it belongs - in Nova Scotia classrooms."
Mr. Harrison stressed that teachers are entitled to the benefits
that have been fairly negotiated for them, and these benefits
remain fully protected.
"The matter in question concerns tax dollars given for a clear
and specific purpose. Taxpayers, school boards and teachers
themselves contributed this money to pay for specific benefits
- nothing else. Yet multi-million-dollar surpluses were allowed
to build up - without our knowledge - for years."
The province's legal advice states the surpluses belong to the
contributors to the insurance plans. Based on their respective
contributions, the province is entitled to approximately $3.65
million, and school boards to approximately $2 million.
The minister said that every dollar returned to the province from
these surpluses will be directed to support students in the
classroom. "We're not talking about pocket change," Mr. Harrison
said. "I want the money that belongs to taxpayers returned, so
that every available dollar can go to school boards, and be put
to work in Nova Scotia classrooms."
About $4 million of this surplus has been contributed by
teachers. The province will make this information available to
teachers through their school boards, but repayment or questions
about how this money is spent is a matter between the NSTU and
its members.
Currently, these surpluses are being used for a variety of
purposes, none of which have been negotiated with the province.
For example, discretionary health benefits which are outside
teachers' negotiated packages have been funded, part of the
surplus has been used for building repairs at the NSTU head
office on Dutch Village Road, Halifax, and millions of dollars
are being held by the NSTU or the NSTU trustees.
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NOTE TO EDITORS: Copies of the Auditor General's report and the
department's letter to the NSTU are available by calling Donna
MacDonald, 902-424-2615.
Contact: Donna MacDonald 902-424-2615
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NOVA SCOTIA TEACHERS UNION GROUP INSURANCE PLANS' SURPLUS
MEDIA BACKGROUNDER
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History:
The province (through the Department of Education and Culture),
school boards and teachers cost-share group insurance plans
administered by the Nova Scotia Teachers Union (NSTU) Group
Insurance Fund Trustees. Specifically, the plans are Master Life
& Accidental Death & Dismemberment (AD&D); Total Care (Medical &
Dental); and Salary Continuation (long-term disability).
Despite the fact that the province contributes approximately $10
million annually, and school boards and teachers contribute
approximately $7 million more to these plans annually, the NSTU
repeatedly blocked attempts by the province to examine how this
money was being spent:
* Prior to 1990, the NSTU used the collective agreement to block
the province's requests for information.
* In 1990, Article 34.07 was first negotiated. This provided
some information on receipts and disbursements, but the full
financial statements for the plans were again withheld by the
NSTU.
* In 1994, a request from the Auditor General to audit the plans
was refused by the Nova Scotia Teachers Union.
In 1995, the province changed the law (in the new Education Act)
to require the Nova Scotia Teachers Union to fully open the books
to the Auditor General. As a result, the Auditor General audited
the plans this spring and provided a draft report to the Nova
Scotia Teachers Union and the Department of Education and Culture
in July. The report identified a surplus of $10,013,726.
Breakdown of the Surplus:
The Auditor General found a significant surplus in the following
plans:
Master Life and Accidental Death & Dismemberment(AD&D) $2,400,000
Medical Plan $2,600,000
Dental Plan $13,726
Salary Continuation $5,000,000
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$10,013,726
Ownership of Surpluses:
Monies provided by taxpayers, school boards and teachers are
given for a specific purpose -- teacher benefits as outlined in
the collective agreement. No agreement was ever reached with the
province to allow the NSTU or NSTU Group Insurance Fund Trustees
to use these funds, or surpluses from them, for any other
purpose. Yet the surpluses are being used in a variety of ways,
none of which have been agreed to by the people who contributed
to the plans. Those purposes include:
* discretionary health benefits which are outside teachers'
negotiated packages
* building repairs at the NSTU head office on Dutch Village Road
The Attorney General, and independent legal advisors, state these
surpluses belong to the people who contribute to these plans
- taxpayers, school boards and teachers. Based on the
contributions of each partner to these plans, ownership of the
surplus is as follows:
PROVINCE BOARDS TEACHERS
Master Life and AD&D $1,824,000 -- $576,000
Medical Plan $1,820,000 $780,000 --
Dental Plan $6,314 $7,412
Salary Continuation -- $1,200,000 $3,800,000
$3,650,314 + $1,980,000 + $4,383,412
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= $10,013,726
On November 12, 1996, the province sent a letter to the NSTU,
requesting repayment of this surplus. This information has also
been shared with school boards.
Next Steps:
The Department of Education and Culture wants to meet with the
NSTU to resolve this issue.
Once the matter is resolved, the province has committed that
every dollar returned from these surpluses will be channelled
directly back to benefit students and teachers in the classroom.
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trp Nov. 13, 1996 - 2:50 p.m.